SafeNow is an accrual-based calendar year corporation that manufacturers, sells, and installs sprinkler systems in commercial buildings. The price of the system includes two free service calls. The cost of each service call is $50. At the end of 2023, SafeNow accrued a

$27,800 expense and a $27,800 liability for future service calls for systems sold in 2023. By September 15, 2024, SafeNow had made 250 service calls for 2023 systems; from September 16 through December 31, 2024, SafeNow made 100 additional service calls for 2023 systems.

a. If SafeNow has not adopted the recurring item exception as its method of accounting for service calls, how much of the $27,800 accrued expense can it deduct in 2023 and 2024.

b. If SafeNow has adopted the recurring item exception as its method of accounting for service calls, how much of the $27,800 accrued expense can it deduct in 2023 and 2024?